Three-quarters (74%) of employer respondents are expecting to increase salaries in 2013, according to research by global management consultancy Hay Group.
Its Reward in 2013 report surveyed 125 organisations, representing more than a quarter of a million UK employees.
It found that 51% of respondents are expecting to increase salaries by up to 2%, while 38% are expecting to raise pay by between 3% and 5%.
The number of organisations implementing pay freezes will decrease this year, falling to 8% from 18% in 2012.
The research also found:
- 56% of respondents expect to meet or exceed their bonus targets in 2013, compared to 29% in 2012
- 51% of respondents said their organisation’s incentive programme is fit for purpose.
- 49% of respondents plan to review their pay and reward system in 2013, while 6% will consider decreasing their benefits package.
Christopher Smith, consultant at Hay Group, said: “Yet again, UK employees are facing a significant squeeze on take-home pay, as salaries fail to keep up with inflation.
“In this uncertain climate, and at a time when reward budgets are tight, it is vital that HR managers prioritise employee engagement to safeguard productivity.
“In order to drive the most value from reward, clear and timely communication is key to enabling staff to recognise and understand the benefits on offer, particularly when it comes to engaging top performers.
“For instance, a third of HR mangers we spoke to have recently introduced total reward statements to spell out the value of their package. However, organisations should also look beyond reward when it comes to motivating employees.”